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Open contracting & the EU in 2020: What to expect

Procurement accounts for 14% of the EU’s gross domestic product and, in some member states, over a third of government spending. Businesses, especially small and medium-sized enterprises (SMEs), who are looking for lower barriers to sell to governments, are after more efficiency and value for money. Residents, like you and me, want the very best services, works, and goods for their tax money.

Just imagine how great it would be to know that your government builds the best possible quality kindergartens, schools, parks, roads, and hospitals for your quality of life. Or, if you are more of a pessimist, at least expect that the newly-built infrastructure is safe to use. Remember the horrific scenes of that bridge in the Italian city of Genoa collapsing in the summer of 2018? At the OCP, we help governments use open data, open government principles, and technology to make better, smarter purchasing decisions.

2020 is a big year for Europe as the Commission and member states lay out a coherent vision for the next five years. A fair, level playing field for public contracts has been a core part of their vision for a single market: we think that vision now has to evolve to the next level, moving beyond relying on governments sharing basic notices about upcoming tenders to being a smart, integrated digital marketplace that fosters innovation and economic opportunity. This is especially important for the EU Cohesion funds for regional development: they are one of the most visible signs of pan-European collaboration and Commission spending (indeed, about 30% of its budget) and they’ve rightly drawn a lot of flak as a vector for mismanagement and opacity by local elites.

The story so far

Most EU countries already publish lots of procurement information, either through so-called contract registers or open data initiatives (both supported by the Commission). But there is no shared agreement across the EU about the scope of required publication, data formats, accessibility, usability, etc. Governments publish as they choose, often satisfying minimum publication requirements. Those registers are more of a dead drop, information quality can be poor and is often entered across parallel systems that don’t talk to each other.

The good news is that, in contrast to a few years ago, many countries, including Finland, France, Italy, Lithuania, the Netherlands, Poland, Portugal, and Slovenia, use or have confirmed plans to use the Open Contracting Data Standard (OCDS) to address these challenges. I am particularly encouraged by Portugal, which started publishing in OCDS in 2019, after developing a procurement system that is arguably the most advanced in the EU. A lot remains to be done to see more countries implement open contracting more solidly, but the increase in interest in OCDS from at least half of the EU countries signals a positive change.

The European Commission has been supportive too: promoting contract registers or open data projects more widely. The Commission requires member states to publish every tender above EUR 110,000 in a standardized format on its Tenders Electronic Daily (TED) service, although compliance is patchy. The new TED forms have adopted a lot of the same reporting ideas as the OCDS and should further improve the quality and transparency of member state procurement data in the next two to three years. But member states will have the final say as to whether they publish around 20 mandatory fields or up to 250 optional ones. To ease the link between eForms and OCDS, we mapped the current eForms to OCDS and will do the same with the new eForms, once the eForms schema is finalized in the next few months.

Beyond procurement data publication, the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is embarking on work to collect and analyze procurement data and look at its quality and completeness (hopefully to be announced soon). The Directorate-General for Regional and Urban Policy (DG REGIO) is supporting the civil society monitoring of Cohesion funds through its Integrity Pacts project with Transparency International and organizing events and conferences to scale up its support for civic engagement. Europe’s civil society and academia are hotbeds of innovation in this regard, with projects such as Digiwhist (on digital whistleblowing on corrupt contracts), Elvis (visualizing the networks behind public spending), TheyBuyForYou, and many others.

So far so good. Now comes the real opportunity to embed a step change in how business with government is done in Europe, moving beyond compliance with minimum standards to unlock innovation and global best practices. For the single procurement market to thrive, high-quality, standardized open data must be at its core.

What to expect in 2020?

We think the European Commission can do much more to encourage the creation of unified and standardized procurement data infrastructure.

First of all, the Directorate-General for Communications Networks, Content and Technology (DG CONNECT) is currently defining a list of datasets that will mandate governments to publish certain datasets as open data under the PSI/Open Data Directive. In a recent public letter, 80 civil society organizations, companies, universities and individuals made a compelling case as to why publishing procurement data offers considerable benefits.

This is not a crazy idea to believe. Recent research from Yale and others showed that publishing open data on procurement led to significant increases in competition, access for more new vendors and decreased prices. These savings could run into potentially billions of Euros given the size of the EU’s procurement market, especially if contract management is further improved. Not everything was perfect though: the study suggested increased competition may have come at the expense of lower contract performance, particularly if suppliers were new, procurement projects were complex, and contracts were awarded solely based on price but these could be addressed with better policy making.

Secondly, the Publication Office can start using OCDS to make TED data more accessible and user-friendly. This will not singlehandedly solve the data quality issues but we believe it will boost the usability of the TED data. The same consortium of CSOs, academics, businesses and thinkers have also made this case to the Publication Office.

Thirdly, DG GROW can push very hard to make sure countries implement eForms to the fullest scope possible.

To make procurement simpler and smarter at the country level, we need to see more solid implementations of the OCDS embedded in systemic reforms. Governments must start assuming the responsibility of engaging stakeholders in data reuse. This should not be a transparency effort alone. Many governments (such as Italy, Portugal, and Slovenia) are thinking about how to improve their own businesses processes using open data. Together with the Ministry of the Interior of the Netherlands and Hivos, we are organizing a two-day workshop in May to help up to 10 EU governments on that journey. Stay tuned and drop us a line if you want to get involved.

As for OCP, our focus in the EU in 2020 will be:

The EU machinery is certainly not known for its efficiency and speediness. But I anticipate, eagerly, that we will see major strides this year to open up public procurement across the EU. Even a slight shift of 1% in efficiency would save the EU around EUR 20 billion per year. So every small win means a lot for EU citizens.

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